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Brexit is actually far worse news for those commercial
rivals than it is for the apparently beleaguered Corporation. In the current
context, Lord Hall’s much criticised licence fee deal last year now looks a
pretty shrewd bargain – while all UK broadcasters will struggle with the impact
of the devaluation of sterling and potential recession, only the BBC has a
guaranteed, inflation-proof, income for the next five years, protecting it at
least from the forecast rise in RPI.

The main commercial broadcasters, on the other hand, are
facing a significant drop in advertising income – Claire Enders of Enders
Analysis recently told the Lords Select Committee on Communications that it
could be as much as five to ten per cent. At
the same time rising inflation and the weakness of sterling will put pressure
on their production and acquisition costs. The slump in the share price of ITV, one of the great UK media success
stories of the last few years, tells you everything you need to know about
where that may end. But if the BBC is
(comparatively) insulated from the economic fallout from Brexit, there is still
some crucial unfinished business to be settled around the Charter.

The most important issue is governance and the BBC’s
independence – which still hangs in the balance. The erosion of the BBC’s
independence over the last Charter period had been relentless – top slicing of
the licence fee to fund government pet projects; two indefensible licence fee
settlements where the public interest was noticeably absent; and a flawed
governance system imposed on the BBC against its wishes at the end of the last
Charter renewal process which left the BBC’s ability to defend itself weakened
by confusion over who was really in charge and which contributed to a series of
pretty catastrophic management mistakes. At the same time the licence was cut in real terms each year, while
commercial rivals continued to grow.

Sir David Clementi’s review came up with a sensible proposed
new structure for the BBC – a unitary Board to run the Corporation and an
external regulator (Ofcom) to regulate it. Even those of us who would have
preferred a bespoke regulator accepted his proposals as a workable solution and
far better than the hapless Trust. The crucial issue is: who appoints the
members of that powerful new unitary Board? Clementi envisaged a Board with, as
a minimum, a majority of independent members appointed by the BBC itself – six to seven non-executives and two to
three executives out of a Board of 14 to 15. The report sets out two options
for the appointment of the rest of the Board: ‘a specially devised system which
is independent in all respects’ or ‘appointment by the government, subject to
certain safeguards’.

Clementi set out his safeguards if the government chose the
second option. The chair and deputy chair would be appointed from a very short shortlist
and subject to parliamentary scrutiny: the other four board members,
representing the interests of the Nations and the English Regions would be
appointed by the government both for their relevant expertise and for their
understanding of the issues in the Nations and English Regions. The politics of
Scotland, Wales and Northern Ireland are so different from those of Westminster
that Clementi envisaged assessors from the nations having a role in the
appointments. The
government duly went for this option in the White Paper.

In his evidence to the House of Commons culture committee in
June, the BBC’s director-general Tony Hall accepted that the government was
going to appoint the six – and put his faith in a public appointments system
that he hoped would provide independent-minded people with the right skills.
The committee members were less sanguine about escaping government interference
– they had had un uncomfortable argument in an earlier session with John
Whittingdale, the former culture secretary, over what some of the committee saw
as his interference in an appointment at the National Portrait Gallery.

John Whittingdale argued that because the new BBC board
would have no editorial role pre-transmission, there was no threat to BBC
independence. The Charter would make explicit the convention that the director
general is editor-in-chief and the Board only gets involved in programme
matters after the programme has been broadcast. While this is a useful
safeguard, its value should not be exaggerated. In practice, no BBC Board has
intervened pre-transmission since the disastrous decision of the Governors in
1985 to pull a controversial documentary –Real Lives: At the Edge of Union – under
pressure from Margaret Thatcher and her government. That BBC Board was
notoriously packed by the government of the day with people of a similar point
of view to it and went on in 1987 to fire the director-general, Alasdair Milne,
after years of miserable conflict between the Board and the management. Even
so, when I was on the BBC Board from 2004 to 2010, the Governors and later the
Trustees found themselves lobbied strongly on occasions to intervene ahead of
transmission – on the controversial Jerry
Springer The Opera, for example – and had to remind themselves why, although
theoretically they could, that it was a terrible idea.

But even if it does not intervene ahead of transmission, the
new Board will have a big say in editorial policy – through the complaints
system, the editorial guidelines and the general processes of review and budget
allocation. On top of that, the new
structure will give Ofcom the final word on the impartiality and accuracy of
the BBC’s journalism. So far, Ofcom has proved itself to be an effective,
independent and fair-minded regulator of commercial broadcasting – but
regulating the BBC is a much bigger and more fraught job and Ofcom will find its
staff (and its own, government-appointed, Board) under far more pressure and
scrutiny.

And the proposed structure leaves the BBC with a Board with
some potentially very dangerous fault lines – between non-executives chosen (by
the BBC) for their expertise and independence and those chosen (by the
politicians via the public appointments process) for what might be seen as their
political acceptability. Given the complexities of post-devolution politics,
you could also envisage tensions between the political appointees from the
Nations and the political appointees from the Westminster government. Although there is general agreement that the non-executives
representing the Nations should not be ‘shop stewards’, lobbying for their part
of the UK, that may be easier said than achieved.

The only positive development in recent weeks has been the decision
to allow the current Trust chair, Rona Fairhead, to continue as chair of the
new unitary board. We should all wish
her and Peter Riddell, the new Commissioner for Public Appointments, the very best
of luck in ensuring – through these crucial board appointments which will need
to be made over the next few months – that the BBC retains what really makes
it, as the White Paper promises, distinctive – the fact that it is a public, rather than a state, broadcaster.